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Poverty, Planning, Finance and Economic/Social Development (Part-II)

📆 March 17, 2025

Total Questions: 50

1. Among the following who are eligible to benefit from the "Mahatma Gandhi National Rural Employment Guarantee Act"? [2011-1]

Correct Answer: (d) Adult members of any household.
Solution:All adult members of the household who registered can apply for work. To register, they have to:

Be local residents

2. With reference to the Finance Commission of India, which of the following statements is correct? [2011-1]

Correct Answer: (d) None of the statements (a), (b) and (c) given above is correct in his context
Solution:The Commission shall make recommendations as to the following matters, namely:

(i) The distribution between the Union and the States of the net proceeds of taxes which are to be, or may be, divided between them and the allocation between the States of the respective shares of such proceeds;

(ii) The principles which should govern the grants-in-aid of the revenues of the States out of the Consolidated Fund of India and the sums to be paid to the States which are in need of assistance by way of grants-in-aid of their revenues under article 275 of the Constitution for purposes other than those specified in the provisions to clause (1) of that article; and

(iii) The measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats and Municipalities in the State on the basis of the recommendations made by the Finance Commission of the State.

3. What is the difference between "vote-on-account" and "interim budget" ? [2011-1]

1. The provision of a "vote-on-account" is used by a regular Government, while an "interim budget" is a provision used by a caretaker Government

2. A "vote-on-account" only deals with the expenditure in Government budget, while an "interim budget" includes both expenditure and receipts

Which of the statements given above is/are correct?

Correct Answer: (b) 2 only
Solution:Statement 1 is not correct as caretaker Government is the government which is ready to Go, it does not present the Interim Budget. The Interim Budget is presented by the Incoming Government or new Government which has different fiscal and revenue plans from the outgoing Government.
S.N. Vote on account Interim Budget
1.It deals only with the expenditure side of the government budget.It includes both expenditures and receipts of the government's budget.
2.It is for only two or three months.It is for one year.

Difference between Interim budget and Vote-on-account:

A vote-on-account contains only the expenditure of the government's budget while an Interim Budget is a complete set of accounts i.e. it includes both expenditure and receipts. Hence, statement 2 is correct.

Vote-on-account is passed every year and is used by both the regular and caretaker government.

Interim Budgets also can be presented by all governments whether incumbent or regular or caretaker. Hence, statement I is incorrect.

4. Why is the offering of "teaser loans" by commercial banks a cause of economic concern? [2011-1]

1. The teaser loans are considered to be an aspect of sub-prime lending and banks may be exposed to the risk of defaulters in future.

2. In India, the teaser loans are mostly given to inexperienced entrepreneurs to set up manufacturing or export units.

Which of the statements given above is/are correct?

Correct Answer: (a) 1 only
Solution:The statement 1 is correct because it includes the definition of teaser loans but the statement (2) is not correct, because in India teaser loan is provided to the home buyers not setting up manufacturing or export units.

5. Which of the following can aid in furthering the Government's objective of inclusive growth? [2011-1]

1. Promoting Self-Help Groups.

2. Promoting Micro Small and Medium Enterprises.

3. Implementing the Right to Education Act.

Select the correct answer using the codes given below:

Correct Answer: (d) 1,2 & 3 only
Solution:The concept of the inclusive growth is based on both economic and social empowerment of ordinary and under privileged individuals. Thus all the statement are correct.

6. Why is the Government of India disinvesting its equity in the Central Public Sector Enterprises (CPSES)? [2011-1]

1. The Government intends to use the revenue earned from the disinvestment mainly to pay back the external debt.

2. The Government no longer intends to retain the management control of the CPSES

Which the correct statements given above is/are correct?

Correct Answer: (d) Neither 1 nor 2
Solution:When we say "Mainly" the money is to be used to pay the external debt, it is not correct to say so. Government though "may intend" to retain the management control, but there are fiscal constraints, that induce the government to go for disinvestment. Both statements are NOT correct.

7. Economic growth is usually coupled with [2011-1]

Correct Answer: (b) Inflation
Solution:Inflation and economic growth are parallel lines and can never meet. Inflation reduces the value of money and makes it difficult for the common people. Inflation and economic growth are incompatible because the former affects all sectors as indicated by CPI or Consumer Price Index.

8. The lowering of Bank Rate by the Reserve Bank of India leads to : [2011-1]

Correct Answer: (a) more liquidity in the market
Solution:Bank rate refers to the official interest rate at which RBI will provide loans to the banking system which includes commercial/cooperative banks, development banks etc. when RBI lowers the bank rate, the cost of borrowing for banks decreases and the credit volume gets increased leading to increase in money and more liquidity in the market.

9. With what purpose is the Government of India promoting the concept of "Mega Food Parks"? [2011-1]

1. To provide good infrastructure facilities for the food processing industry.

2. To increase the processing of perishable items and reduce wastage.

3. To provide emerging and eco-friendly food processing technologies to entrepreneurs.

Select the correct answer using the codes given below:

Correct Answer: (b) 1 & 2 only
Solution:The Mega Food Park scheme was launched in2008 to set up modern infrastructure facilities for food processing industries.

The Schemes is under the purview of the Ministry of Food Processing Industries.
4 It establishes a mechanism to bring together farmers, processors and retailers and link agriculture production to the market to ensure maximization of value addition, minimization of wasteage and improving farmers' income.

Main objectives of the scheme:

To provide modern infrastructure for food processing. Hence, statement 1 is correct.

To increase the processing of perishable items and reduce wastage.

Hence, statement 2 is correct.

10. How do District Rural Development Agencies (DRDAs) help in the reduction of rural poverty in India? [2011-1]

1. DRDAs act as Panchayati Raj Institutions in certain specified backward regions of the country.

2. DRDAs undertake area-specific scientific study of the causes of poverty and malnutrition and prepare detailed remedial measures.

3. DRDAs secure inter-sectoral and inter-departmental coordination and cooperation for effective implementation of anti-poverty programmes.

4. DRDAs watch over and ensure effective utilization of the funds intended for anti-poverty programmes.

Which of the statements given above is/are correct?

Correct Answer: (b) 3 & 4 only
Solution:DRDA has traditionally been the principal organ at the district level to oversee the implementation of anti-poverty programmes of the Ministry of Rural Development. It does not acts as Panchayati Raj Institutions.
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